(FreedomBeacon.com)- Over the weekend, former Federal Reserve Chairman Ben Bernanke suggested it was still possible the Fed could avoid a recession while addressing inflation with a “softish landing.”
In an appearance on CNN Sunday, Bernanke told Fareed Zakaria that he agreed with Larry Summers that a recession is possible.
Earlier former Treasury Secretary Larry Summers had told CNN’s State of the Union that any effort by the Fed to tackle inflation would induce a recession.
Bernanke told Zakaria that economists have a difficult time predicting recessions, but he believes the Federal Reserve “has a decent chance” at accomplishing what Fed Chair Jerome Powell recently described as a “softish landing” by bringing down inflation either results in no recession at all or only a “very mild” recession.
He said he doesn’t think the current state of the economy resembles the inflation that occurred in the 1970s, nor does he believe the country is out of options in solving the current economic problems.
He pointed out that the inflation from the 1970s lasted for around 13 to 14 years, rather than months. He said in the 1970s, Americans grew used to high inflation “and a huge inflation psychology developed.” But today, the situation is very different, Bernanke added. Today, the Federal Reserve has a lot of credibility and knows that it is responsible for inflation, so the Fed is “going to take the lead.”
He told Zakaria that for 40 years, the country had low inflation.
Yes, well it doesn’t anymore, does it? The annual inflation rate in May reached a 41-year-high of 8.6 percent.
It is odd that Bernanke is claiming that the Federal Reserve has a lot of credibility when just last month he blasted the Fed over its slow response to inflation.